Advocacy of a night-watchman state is known as minarchism. Minarchists argue that the state has no right to use its monopoly on the use of force to interfere with free transactions between people, and see the state's sole responsibility as ensuring that transactions between private individuals are free. As such, minarchists generally believe in a laissez-faire approach to the economy. The rationale for this belief may be economic prosperity, moral limitations on the use of state force, or both.[citation needed]

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The phrase "Nachtwächterstaat" was coined by GermansocialistFerdinand Lassalle in an 1862 speech in Berlin. He criticized the "bourgeois" liberal limited government state, comparing it to a night watchman whose sole duty was preventing theft. The phrase quickly caught on as a description of limited government, even as liberalism began to mean a more interventionist state.[4]Ludwig von Mises later opined that Lassalle tried to make limited government look ridiculous, but that it was no more ridiculous than governments that concerned themselves with "the preparation of sauerkraut, with the manufacture of trouser buttons, or with the publication of newspapers."[5]

Minarchists generally justify the state on the grounds that it is the logical consequence of adhering to the non-aggression principle. They argue that anarchism is impractical because it is not sufficient to enforce the non-aggression principle. They argue that this is because the enforcement of laws under anarchism is open to competition,[6] although this argument would only apply to anarcho-capitalism, as no traditional anarchists argue for a free-market law system. Another common justification is that private defense and court firms would tend to represent the interests of those who pay them enough.[7]Robert Nozick in Anarchy, State, and Utopia argued that a night watchman state provides a framework that allows for any political system that respects fundamental individual rights.

Anarcho-capitalists generally argue that the presence of any form of government, or state, violates the non-aggression principle. By its nature, they argue, a government uses force against those who have not stolen private property, vandalized private property, assaulted anyone, or committed fraud.[8][9] Many also argue that monopolies tend to be corrupt and inefficient.

Murray Rothbard argued that all government services, including defense, are inefficient because they lack a market-based pricing mechanism regulated by the voluntary decisions of consumers purchasing services that fulfill their highest-priority needs and by investors seeking the most profitable enterprises to invest in. Therefore, the state's monopoly on the use of force is a violation of natural rights. He wrote, "The defense function is the one reserved most jealously by the State. It is vital to the State's existence, for on its monopoly of force depends its ability to extract taxes from the citizens. If citizens were permitted privately owned courts and armies, then they would possess the means to defend themselves against invasive acts by the government as well as by private individuals."[10] In his book Power and Market, he argued that geographically large minarchist states are indifferent from a unified minarchist world monopoly government.[11] Rothbard wrote that governments were not inevitable, noting that it often took hundreds of years for aristocrats to set up a state out of anarchy.[12] He also argued that if a minimal state allows individuals to freely secede from the current jurisdiction to join a competing jurisdiction, then it does not by definition constitute a state.[13]

Social anarchists criticize the state as being founded around the protection of private property and the mode of production that surrounds it. Thus, the minarchist state is a reductionist form of the welfare state, and not substantially different from it in purpose, according to this analysis. Social anarchists argue that only with the abolition of the state, whether it be the faux-compassionate welfare state or the boldly unconcerned austerity state, can truly just economic relations and prosperity for all come about.

Social liberals and social democrats argue that a government ought to appropriate private wealth in order to ensure care for disadvantaged or dependent people such as children, the elderly, the physically and mentally disabled, immigrants, the homeless, the poor, the unemployed, caretakers, or victimized minority groups.

Social conservatives argue that the state should maintain a moral outlook and legislate against behavior commonly regarded as culturally destructive or immoral; that, indeed, the state cannot survive if its citizens do not have a certain kind of character, integrity and civic virtue, and so ignoring the state's role in forming people's ethical dispositions can be disastrous.

^Murray Rothbard. Power and Market: Defense services on the Free Market. p. 1051. It is all the more curious, incidentally, that while laissez-faireists should by the logic of their position, be ardent believers in a single, unified world government, so that no one will live in a state of “anarchy” in relation to anyone else, they almost never are.

^Murray Rothbard. Power and Market: Defense services on the Free Market. p. 1054. In the purely free-market society, a would-be criminal police or judiciary would find it very difficult to take power, since there would be no organized State apparatus to seize and use as the instrumentality of command. To create such an instrumentality de novo is very difficult, and, indeed, almost impossible; historically, it took State rulers centuries to establish a functioning State apparatus. Furthermore, the purely free-market, stateless society would contain within itself a system of built-in “checks and balances” that would make it almost impossible for such organized crime to succeed.